Claudia Fan Munce heads IBM's Venture Capital Group, which she runs from Big Blue's venerable Almaden Research Center in San Jose. IBM scientists stationed there over the decades have pioneered such technologies as the disk drive and the distributed relational database.

But Munce admits it bugs her that after such a long legacy, many in the valley still consider New York-based IBM something of an outsider. In this week's Elevator Pitch, she talks about the company's new trove of money for startups built on Watson, the IBM "cognitive computing" system best known for defeating two human champions on "Jeopardy."

Q How'd you get into this racket?

A My IBM career started here in 1985. After holding a variety of different technical and business leadership positions, I became a founding member of the IBM Venture Capital Group in 2000 and became managing director in 2004. This has been particularly exciting to me, as I'm Chinese and grew up in Brazil, and in recent years IBM's venture group (and Silicon Valley venture investing) have expanded to those countries and many others.

Q What kinds of pitches are you looking for now?

A We're not looking to get a financial return through equity, but we are looking for top-line revenue growth through innovative partnerships with startups and VCs. That helps IBM keep its finger on the pulse of the latest trends in innovation and the intersection of key technologies such as cloud, big data and analytics, cognitive computing and mobile.

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One way that IBM supports startups is through IBM SmartCamps, held around the globe to empower startups to tackle the world's greatest challenges in areas such as health care, water management and energy efficiency. Even though I've heard hundreds of entrepreneurs pitch their businesses, it never gets boring. There is always a new idea that could change the way we live.

Q What's the biggest mistake entrepreneurs make?

A One of the biggest is underestimating the value of being part of an ecosystem and building strategic partnerships. Starting a business is no easy task. According to even the most optimistic studies, three out of every four startups fail. To combat these odds, entrepreneurs must search for new ways to gain a competitive edge, network with the right people and, most important, raise funds. I always encourage entrepreneurs to keep an open mind when it comes to partnerships, as they can lead to many future opportunities.

Q What's the next big thing going to be?

A Being an IBMer working in Silicon Valley since 1985 has exposed me to pretty much every technology and business trend in the last 30 years -- from the PC and the birth of the Internet to today's "big data" deluge and the great cloud migration and the recent emergence of cognitive computing.

I think the next big trend is going to be the continued expansion and application of cloud, mobile, big data analytics and cognitive computing to new business ventures.

Q You recently announced a $100 million fund for "Watson-powered startups." What exactly does that mean?

A In November, IBM announced it would make Watson available as a development platform in the cloud, to enable a worldwide community of software providers to build a new generation of apps. The move aims to spur innovation in a variety of industries (such as retail and health care) and in companies of all sizes, ranging from startups to established players. Recently, IBM announced it will establish the IBM Watson Group, a new business unit dedicated to the development and commercialization of cloud-delivered cognitive innovations. This will include $100 million for venture investments to syndicate with our VC partners and support IBM's ecosystem of software providers.

Watson represents a new era of computing based on its ability to interact in natural language, process vast amounts of big data and learn from each interaction. So much has happened since Watson appeared on "Jeopardy" -- Watson is an ultimate adviser in its ability to sift through and understand massive amounts of data at unprecedented speeds.

Q IBM is one of relatively few U.S. tech giants that aren't based in Silicon Valley. How does Big Blue view the valley, and vice versa?

A IBM has deep roots in the region. Many key IBM inventions were born in IBM's local facilities, from the disk drive to the cognitive computing chips researchers are building today at our Almaden research lab. Silicon Valley has been and continues to be an important part of IBM's strategy.